Posted 1 year ago on Nov. 4, 2012, 6:25 a.m. EST by factsrfun
from Phoenix, AZ
This content is user submitted and not an official statement
This is from the Congress’s own think tank some highlights.
“Although the statutory top marginal tax rate was over 90% in the 1950s, the average tax rate for the very rich was much lower. The average tax rates at five-year intervals since 1945 for the top 0.1% and top 0.01% of taxpayers is shown in Figure 1. The average tax rate for the top 0.01% (one taxpayer in 10,000) was about 60% in 1945 and fell to 24.2% by 1990. The average tax rate for the top 0.1% (one taxpayer in 1,000) was 55% in 1945 and also fell to 24.2% by 1990, following a similar downward path as the tax rate for the top 0.01%. Between 1990 and 1995, the average tax rate for both the top 0.1% and top 0.01% increased to about 31%. After 1995, the average tax rate for the top 0.01% was lower than that for the top 0.1%.”
“It is recognized that measure of U.S. income disparities have increased over the past 35 years. According to income tax data, average inflation-adjusted or real income increased by 116% (that is, about doubled) since 1945. Average real income increased by 395% for the top 0.1% and by 692% for the top 0.01% over this period. Average real income for the balance of the top 1% in the income distribution (i.e., all but the top 0.1%) increased by about 165%. The share of income going to the top 1% increased from 12.5% in 1945 to 19.8% in 2010. Three-quarters of this increase in income share went to the top 0.1%. Since the major changes in the distribution of income were largely due to changes in the top 0.1% of the income distribution, the focus of the analysis is on the top 0.1%.”
Concluding Remarks: “The top income tax rates have changed considerably since the end of World War II. Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The average tax rate faced by the top 0.01% of taxpayers was above 40% until the mid-1980s; today it is below 25%. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the second World War.
The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.
However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.”
The GOP are worried their cover-up will become uncovered